Credit Suisse is planning to borrow up to 50 billion Swiss francs (£45 billion) from Switzerland’s central bank in a bid to boost its liquidity and calm investors a day after the bank’s share price plummeted.

Credit Suisse plunged and dragged down other major European lenders in the wake of bank failures in the United States. At one point, Credit Suisse shares lost more than a quarter of their value, hitting a record low after the bank’s biggest shareholder — the Saudi National Bank — told news outlets that it would not put more money into the Swiss lender, which was beset by problems long before the US banks collapsed.

The turmoil prompted an automatic pause in trading of Credit Suisse shares on the Swiss market and sent shares of other European banks tumbling, some by double digits.

That fanned new fears about the health of financial institutions following the recent collapse of Silicon Valley Bank and Signature Bank in the US.

Speaking on Wednesday at a financial conference in the Saudi capital of Riyadh, Credit Suisse chairman Axel Lehmann defended the bank, saying “we already took the medicine” to reduce risks.

When asked if he would rule out government assistance in the future, he said: “That’s not a topic… We are regulated. We have strong capital ratios, very strong balance sheet. We are all hands on deck, so that’s not a topic whatsoever.”

Credit Suisse stock dropped about 30%, to about 1.6 Swiss francs (£1.42), before clawing back to a 24% loss at 1.7 Swiss francs (£1.51) at the close of trading on the SIX stock exchange. At its lowest, the price was down more than 85% from February 2021.

Early on Thursday Credit Suisse announced it is taking measures to shore up its finances, including exercising an option to borrow up to 50 billion Swiss francs from the central bank.

A statement from the bank did not specify whether the support would come in the form of cash or loans or other assistance. Regulators said they believe the bank has enough money to meet its obligations at the moment.

“This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs,” the bank said.

A day earlier, Credit Suisse reported that managers had identified “material weaknesses” in the bank’s internal controls on financial reporting as of the end of last year. That fanned new doubts about the bank’s ability to weather the storm.

After the joint announcement from the Swiss National Bank and the Swiss financial markets regulator, the shares also made up some ground on Wall Street.

The stock has suffered a long, sustained decline: in 2007, the bank’s shares traded at more than 80 Swiss francs (£71.20) each.

With concerns about the possibility of more hidden trouble in the banking system, investors were quick to sell bank stocks.

France’s Societe Generale SA dropped 12% at one point, France’s BNP Paribas fell more than 10%, Germany’s Deutsche Bank tumbled 8% and Britain’s Barclays Bank was down nearly 8%. Trading in the two French banks was briefly suspended.

The STOXX Banks index of 21 leading European lenders sagged 8.4% following relative calm in the markets Tuesday.

The turbulence came a day ahead of a meeting by the European Central Bank.

President Christine Lagarde said last week, before the US failures, that the bank would “very likely” increase interest rates by a half percentage point to fight against inflation.

Markets were watching closely to see if the bank carries through despite the latest turmoil.

Europe strengthened its banking safeguards after the global financial crisis that followed the collapse of US investment bank Lehman Brothers in 2008 by transferring supervision of the biggest banks to the central bank, analysts said. The central bank is considered less likely than national supervisors to look the other way at developing problems.

The Credit Suisse parent bank is not part of EU supervision, but it has entities in several European countries that are. Credit Suisse is subject to international rules requiring it to maintain financial buffers against losses as one of 30 so-called globally systemically important banks, or G-SIBs.

Share prices plunged after Saudi National Bank chairman Ammar Al Khudairy told Bloomberg and Reuters that the bank has ruled out further investments in Credit Suisse to avoid regulations that kick in with a stake above 10%.

The Saudi National Bank has invested some 1.5 billion Swiss francs to acquire a holding just under that threshold.

The Swiss bank has been pushing to raise money from investors and roll out a new strategy to overcome an array of troubles, including bad bets on hedge funds, repeated shake-ups of its top management and a spying scandal involving Zurich rival UBS.

In an annual report released on Tuesday, Credit Suisse said customer deposits fell 41%, or by 159.6 billion francs (£142 billion), at the end of last year compared with a year earlier.